Interest in Real Estate Funds Poised to Increase
Blakemore Foster
During the first few weeks of 2009 there has been a noticeable upward trend in the number of investors looking to gain access to and hear from real estate fund managers. Endowments, wealth advisors, funds of real estate funds, and even insurance companies have begun outlining their Q1 investment mandates to BHA, specifically noting their current searches in the real estate space.
There is a wide range of geographical interest that spans from the U.S. to the U.K. and into Asia as investors seek diversified market opportunities. One Holland-based fund of real estate funds is currently exclusively focused on Asian real estate opportunities. It began allocating to funds in this space during the past year and is looking to continue that trend. A large Asian endowment fund is focusing on region-specific real estate managers, and it is especially interested in hearing from Asian-focused funds.
BHA analysts also have found investors focusing on strategies and sectors rather than any specific geographical locations. The research team spoke with two U.S.-based wealth advisors that have a more global approach to their searches. Both want to hear from sector-focused managers. The timber, commercial, and industrial sectors were all mentioned as potentially profitable sectors to which investors are looking to gain more exposure during 2009. In terms of strategies, investors appear to be looking at a wide range, including core, core-plus, and value-added opportunities at the moment.
With the wide range of searches taking place in the real estate space right now, the only trend that has truly emerged is that investors are taking a more diversified and opportunistic approach to real estate managers at the beginning of 2009. Several investors said they would consider any strategy and geographic focus, and are far more concerned with the management team’s experience and past results. If this trend continues, it would appear that real estate managers, in a variety of specialized strategies, should see increased investor interest as long as they have a solid and proven track record and team making the appropriate decisions for the fund.
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